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Blue Cross Blue Shield of Michigan has reached agreements with 25 hospitals and more than 4,789 doctors in Southeast Michigan to provide access to two low-cost individual health plans it is developing for sale later this year.

The two Blue Cross health insurance products, which will be offered in the individual market on healthcare.gov and in the open market, will be available starting Oct. 1 with the effective date Jan. 1, 2015.

"We believe Blue Cross is well positioned to be successful in this product offering because we have had this relationship with hospitals and physicians for some time," said Susan Barkell, Blue Cross' senior vice president for health care value.

Barkell said several hundred thousand uninsured people in Michigan will find affordable options to purchase health insurance with the two health plans. The plans will also be open to those currently insured, she said.

Blue Cross describes the network as an Exclusive Provider Organization. Barkell said the EPO is different than a "narrow network" or "high-performance network" because the hospitals applied to become a part of it rather than be chosen by the insurer.

Last summer, the hospitals and doctors responded to a request for proposal from Blue Cross to join the provider network.

Terry Burke, Blue Cross' vice president for individual business, said the prices for the individual policies will be competitive compared with similar plans. He said he did not have enrollment estimates for the two plans.

"We haven't configured those prices or plans yet since this is for 2015," said Burke, adding that some people will trade off lower prices for a limited number of providers.

Barkell said Blue Cross is finalizing contracts with the hospitals and doctors on pricing, although the providers know what Blue Cross will pay. Benefit designs, which will comply with the Affordable Care Act's 10 essential benefits, will be developed later this year, Burke said.

"We will provide more choice and have more emphasis on people who (can't get insurance through their employer)," Burke said. "This is just one more opportunity for them to purchase an affordable plan."

Blue Cross will also use the exclusive network to provide health care services to other individual plans it sells beginning in November for the policy year starting Jan. 1, 2015.

To offer competitive prices, Blue Cross officials said the individual policies will only cover policyholders who use hospitals and physicians that are part of their designated EPO network. Policyholders must pay for out-of-network care, except for emergency services, Blue Cross said.

While Blue Cross plans to offer at least two products, officials said they have not yet finalized the type of plan that will first be offered. They have determined it will be offered in six counties - Livingston, Macomb, Oakland, Washtenaw, Wayne and St. Clair counties.

Last year, Blue Cross said one product will be an exclusive provider contract offered by Blue Cross Blue Shield and will cover providers in eight counties. They are Lenawee, Livingston, Macomb, Monroe, Oakland, Washtenaw, Wayne and St. Clair.

At the time, Blue Cross said the second product will be through Blue Care Network and will cover providers in seven counties. They are Livingston, Macomb, Monroe, Oakland, Washtenaw, Wayne and St. Clair.

On Jan. 1, a similar exclusive provider network began in West Michigan with Blue Cross and Grand Rapids-based Mercy Health. Mercy Health is part of Livonia-based Trinity Health.

Burke said he did not have enrollment numbers for the two plans – a Medicare Advantage and individual market plan – in West Michigan.

In a statement, Oakwood's Bill Isenstein, senior vice president of managed care, said the Dearborn-based system has put programs into place to shift care management toward wellness and preventing illness.

"Oakwood's partnership with Blue Cross Blue Shield of Michigan offers one more way for us to provide access to affordable health care to the patients and communities we serve," Isenstein said. "Working together with Blue Cross on this limited network product will maximize our ability to provide cost-effective, high-quality care to a larger percentage of those who were previously uninsured."

Patrick McGuire, St. John Providence's CFO, said the Warren-based system participation with the Blue's exclusive provider network fits in with its strategic plan.

"St. John Providence is excited to be part of this new product offering," McGuire said in a statement to Crain's. "Products like this are aligned with our goal of providing high quality, cost effective health care to our community."

In a statement by Kevin Sears, vice president of payer and product innovation with CHE Trinity, participation in the Blue Cross network allows St. Joseph Mercy to increase access to patients who have been previously uninsured.

"We are pleased to be able to serve this newly-insured population and connect them with our quality physicians and programs in Southeast Michigan, " Sears said.

Under the terms of the provider contracts, the participating hospitals and physicians must agree to the following:• Must allow audits of hospital's utilization, quality and health management programs.• Agree not to request or accept payment for services Blue Cross denies.• Agree to include all employed doctors in the network.• Agree to coordinate benefits.• Agree to allow referrals to other hospitals in Blue Cross' network when a service is not available.